The Indonesian government expects energy sector to be able to start producing coal bed methane (CBM) by the second quarter of 2011, an official said.

According to the upstream oil and gas regulator (BP Migas) spokesperson Budi Indianto said in a press release, these CBM would be produced from the West Sangatta I at East Kalimantan operating area which will be operated by the West Sangatta CBM Ltd. "The initial CBM production will reach to one million metric standard cubic feet per day (MMSCFD) and to be used for the 2.5 MW capacity power generators," he said.

West Sangatta has completed three oil wells drilling In 2010 and by the end of January 2011 the operator company will run another four wells. Since the CBM was developed in 2008, there are five contractors and the area owner cooperation contracts were targeted in 2011 to begin producing the gas.

Besides West Sangatta, the other CBM work area namely Sekayu (Medco Energy International), Tanjung Enim (Arrow PTE), Barito Banjar (Indobarambai) and Sanga-Sanga (Vico) which produce 1.5 MMSCFD. "The other contractors will begin to produce CBM in the third to last quarter in 2011)", Budi said.

By the end of the year 2011, Indonesia is targeting to produce 5.5 MMSCFD which will be used for estimated 13.75 MW power plant needs. As the initial steps CBM gas productions is projected to meet small scaled power plants in 2011.

The Operations Support Division Head of BP Migas Sinang Bulawan also mentioned several obstacles faced as CBM production is considered new activities in Indonesia and it is different from the conventional oil and gas production. These obstacles faced by CBM development namely technical operation problems such as the limited special rig CBM, licensing and administrative constraints.

Indonesia is the fifth largest CBM potentials in the world which resources reaching to 453.3 trillion cubic feet (TCF) in 11 basins. There are 23 CBM work areas which contracts have already been signed, the government planned to offer 13 more areas in 2011 and target 10 CBM contracts signing. Government targets CBM production to reach 500 MMSCFD by 2015, 1,000 MMSCFD in 2020, and 1,500 MMSCFD for the year 2025.

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